Inside FC Barcelona’s Global Football Empire

March 21, 2018, 10:30 AM UTC

The suburbs stretching west of Barcelona are dark and quiet on a recent evening. But on one brightly lit hillside, floodlights illuminate perfectly manicured fields, showing a blur of color and action. About 125 boys, some as young as 11, race back and forth across the grass, kicking footballs in a complex choreography of attack and defense.

If this were any other suburb, it might be a regular after-school sports activity. But these are no ordinary kids. In their sweatpants and jerseys, they are here for one purpose: to break into the exceedingly rarefied global industry of top-flight football (or soccer, to use the American word). The boys have been handpicked by professional scouts and plucked from their small clubs across Spain and sometimes abroad. Then, like valuable orchids, they’ve been planted in La Masia, the training academy of Football Club Barcelona—one of the richest and most beloved professional sports franchises anywhere in the world. When I ask which boy could be the next Lionel Messi—Barcelona’s superstar, and some would argue the best footballer in history—a staff member points to a lanky 11-year-old in neon-orange cleats, darting across the field. He tells me the boy is from a modest North African immigrant family in Barcelona and destined for stardom. “He is one of the best in Spain,” he crows.

To be the best in football is the dream of countless millions around the world—a measure of the powerful allure of the most global sport on the planet, with children and adults from the U.S. to Uganda watching their favorite teams playing in packed stadiums hundreds or thousands of miles away.

Aspiring football stars at La Masia, FC Barcelona’s famed training academy.Photograph by Javier Luengo for Fortune
Photograph by Javier Luengo for Fortune

Among the elite clubs, few rank with Barça, as FC Barcelona is commonly known. More than 100 million people follow Barça on Facebook and tens of millions more on Twitter. Barça has cultivated that mammoth following in part through its intensely colorful history. Its slogan is Més que un club, “More than a club.” And FC Barcelona fights not only to win league titles—it has won Spain’s La Liga two dozen times and many European championships—but also to maintain its unique culture within Spain’s semiautonomous region of Catalonia, which has battled for its separate rights from Madrid for more than a century. Through all that, Barça has kept millions glued to its televised matches, thanks to the fast-paced style it developed in the 1980s, dubbed tiki-taka, in which players rapidly pass the ball as they swap positions. The question now is, Can Barça retain its uniqueness, in an industry that is ever more focused on big money?

The business of global football is humongous and still growing fast. More than 3 billion people watched Germany beat Argentina in the final of the 2014 World Cup, run by FIFA, the international football body. That’s more than 30 times greater than the number that watched the Super Bowl in February. The viewership will almost certainly be gargantuan again for this summer’s monthlong World Cup in Russia, which opens in Moscow on June 14 and includes 32 national teams from around the globe. And that’s despite the fact that the U.S., one of the sport’s fastest-growing markets, failed to qualify. No matter: Stars like Barça’s Messi, who is from Argentina, are global brands. In fact, throughout the year, every year, it is professional teams like Barça that command the giant money and audiences—and both are soaring.

Now, after a century of fervent local pride, Barcelona is aiming to become the first club of any sport on the planet to earn 1 billion euros ($1.23 billion) in revenue a year, perhaps as soon as 2020. Last year, the world’s top three football teams—Manchester United, Real Madrid, and Barcelona—brought in combined revenues of around $2.5 billion, thanks to rising TV-rights deals with Europe’s football leagues and sponsorship deals signed by the individual clubs, according to the annual Deloitte “Football Money League” report published in January. All three ranked ahead of the NFL’s biggest revenue generator, the Dallas Cowboys, which had $700 million in sales last year. Elite clubs like Barcelona “are the top revenue-generating sports [franchises] in the world,” says Austin Houlihan, a director at Deloitte’s Sports Business Group in Manchester, England.

Barcelona’s Lionel Messi celebrates after scoring a goal vs. Atlético Madrid on March 4.Alex Caparros—Getty Images
Alex Caparros—Getty Images

But the gaudy numbers mask some festering problems. TV viewership is slipping in parts of the world, with more and more people live-streaming matches on their phones. Meanwhile, top players’ salaries are rocketing up so fast that they have reached sums thought unimaginable less than a year ago.

Both factors trap elite clubs in a continual hunt for money: The harder they compete for the very top rankings, the more money they need just to stay on top. With a tiny handful of teams scrambling to sign the world’s best players, there is a growing gap between the few, like Barça, with enough money to compete at the highest level, and the masses below them. For the 2016–17 season, Barça generated 648 million euros ($706.7 million) in revenue, according to Deloitte, a healthy 25% increase over its total from five years earlier. (Barcelona itself reported 682 million euros in revenue, but Deloitte’s estimate strips out factors like foreign-exchange earnings.)

“If we want to be successful and if we want to have a club that is going to be sustainable, we will need that 1 billion euros in 2020,” says FC Barcelona President Josep Maria Bartomeu, 55, sitting in his executive suite in Camp Nou, Barça’s famous headquarters, which includes Europe’s biggest football stadium, with 99,500 seats. Bartomeu says giant revenues are needed simply “to stay competitive.”

Club president Josep Maria Bartomeu (in glasses) and CEO Oscar Grau (hands clasped) in a recent meeting with Nike to discuss sponsorship.Photograph by Javier Luengo for Fortune
Photograph by Javier Luengo for Fortune

Those big-business imperatives are a sharp departure from Barça’s traditional identity. The club has prided itself, since its founding in 1899, as Catalonia’s scrappy counterpoint to its bitter rival in the capital, Real Madrid—a living embodiment of Spain’s fierce political tensions. “We know we are not only representing Barcelona, we are representing Catalonia,” Gerard Piqué, the team’s star center-forward, tells me. A Barcelona native, Piqué, like Messi, began playing in the La Masia academy at age 13. “We have to compete with all the other clubs that are investing, that are offering much more money,” says Piqué, 31, who signed a new four-year contract in January.

Read our Q&A with Pique titled FC Barcelona’s Gerard Piqué Talks World Cup, Barça Future.

In order to keep the big money flowing, Barça has already compromised some cherished values. In 2011 it became the last major football club to sell the rights to put logos on its team jerseys, signing an estimated $45-million-a-year deal with the Qatar Foundation. The Japanese company Rakuten now pays around $68 million a year to have its name on Barça’s uniforms and last year Bartomeu worked out a lucrative long-term deal with Nike. Barça is also negotiating with corporations for naming rights on its soon-to-be expanded stadium and sports complex, which it expects to open in about four years, with 105,000 seats—a deal that could be worth about 300 million euros over 20 years.

Barça defender Piqué says the club is “everything” to Catalonia.Photograph by Javier Luengo for Fortune
Photograph by Javier Luengo for Fortune

The growing worry among some fans and industry executives is that clubs might increasingly struggle to keep pace with the financial demands. “It is not real, and it is not sustainable,” says Jaume Roures, CEO of MediaPro, the television and communications company headquartered in Barcelona.

If you’re looking for a tipping point in the business of global football, it was surely the day last August when Paris Saint-Germain, or PSG, bought the star Brazilian striker Neymar from Barça for 222 million euros (more than $270 million) in the biggest transfer in football history. That sum was Neymar’s “buyout clause”—the figure, written into his 2013 contract, which another club would need to pay Barça to acquire him. At the time the contract was written, the figure seemed so outrageous that Barça felt sure he would never leave. “We thought nobody would ever pay this,” Bartomeu says. “But somebody came and paid it.”

In fact, Bartomeu had failed to foresee a major looming threat: the growing number of clubs that—unlike Barça—have virtually limitless funds to tap. PSG, for instance, is owned by Qatar Sports Investments, a sovereign fund of one of the richest countries in the world. Other deep-pocketed owners include the United Arab Emirates’ Sheikh Mansour bin Zayed Al Nahyan, who owns Manchester City, and Russian oligarch Roman Abramovich, the owner of Chelsea Football Club.

Barça has faced scrutiny for its own tactics in procuring talent. Last year, Bartomeu and Neymar, among others, were ordered to stand trial for corruption in relation to Barcelona’s deal in 2013 to acquire Neymar from his club team in Brazil. The case is still pending; Barça says it hopes to “reach an agreement before the trial.”

The loss of Neymar to PSG touched off intense nervousness in Barça, who feared a raid on Messi—by far its most valuable asset. Hundreds of millions of fans watch Barça matches, in good part to see Messi sweep across the field and put the ball into the net, goal after goal. “The entire enterprise depends on Messi,” says Santiago Giménez Blanco, the Barcelona editor of Spain’s sports paper AS. What would happen if Messi, 30, moved to another club? “There would be civil war,” Blanco says.

Messi jerseys on sale at Camp Nou.Photograph by Javier Luengo for Fortune
Photograph by Javier Luengo for Fortune

Deeply anxious about losing Messi, Barça signed a new contract with him last November, only five months after it had signed the previous one. The details are secret. But in January the German magazine Der Spiegel published documents it said originated from the club, showing that Messi will now earn more than 100 million euros a year. The new contract boosts Messi’s buyout to 700 million euros, or some $866 million. “We were afraid somebody could come and pay Leo Messi’s buyout clause,” says Bartomeu.

Messi faced legal troubles of his own last year when he and his father were found guilty of tax evasion in Spain. The star’s 21-month prison sentence was changed to a fine of $288,000, and his father was ordered to pay $222,000.

For all Bartomeu’s fears, Barça has played a key role in the quickly rising inflation. Flush with 222 million euros from selling Neymar to PSG, Barça went on a spending spree last summer. It bought Ousmane Dembélé, a 20-year-old Frenchman, from the German club Borussia Dortmund for about 105 million euros—just one year after Dortmund had bought the young player from a French club for 15 million euros. And in January, Barcelona signed the Liverpool FC midfielder Philippe Coutinho for 160 million euros (about $200 million)—the second-biggest transfer in the sport’s history, after Neymar just three months before.

To the Barça watchers, the purchase of both players suggested that the club was panicked. “They are not worth half of what they paid,” says Josep Maria Minguella, a sports agent in Barcelona. The club’s managers “felt betrayed and upset” by Neymar’s departure, he says. “They were under a lot of pressure.” Minguella is credited with securing Messi’s initial commitment with Barça in 2001, after the Argentinian teen had arrived at the Barcelona academy. Since that time, Messi has come to define the club’s reputation for snagging spectacular players—a reputation essential to attracting top players and generating corporate partnerships.

Already massively popular across Europe, Barça sees the U.S. as its major growth area. And in 2016 it opened a U.S. operation in Manhattan—New York lit up the Empire State Building in Barça’s blue, red, and maroon colors to celebrate—putting the club closer to major U.S. sponsors. This spring it is opening a training academy in King’s Park, N.Y., and Bartomeu says it plans to launch a women’s soccer team next year.

Barça’s roots are unquestioned, however. When Messi, Piqué, and the rest of the team make their way from the dressing room to the pitch before a match, they pass through a tunnel under the stadium. One of the last sights they see before sprinting on to the grass is a small chapel cut into the tunnel wall. There, calmly staring out at the players, is a replica of the Virgin of Montserrat, Catalonia’s most famous religious icon and its patron saint, with Baby Jesus on her lap.

Who knows how many players pause for prayer? But the Virgin serves another purpose: She reminds the team of Barça’s deep attachment to Catalonia and its long struggle for autonomy from Spain. “[FC] Barcelona is everything for Catalonia,” says Piqué. “It is by far the most important institution in Catalonia,” he says.

Bartomeu and the board of directors are unpaid, and about halfway through their six-year terms. (For his day job, Bartomeu is the CEO of Adelte, an engineering company specializing in passenger walkways.) All of the directors trace their Catalan roots back many generations. And their positions at Barça give them celebrity status in the region. “In Catalonia, to be on the board of FC Barcelona is more than an honor,” says board vice president Manel Arroyo, also a business executive. “It is important you understand the sensibility of this club,” he says. “It is being in connection with the country, with Catalonia, with all the elements around FC Barcelona, in all our history.

Fans raise Catalonian flags to show regional pride.Getty
Photograph by Javier Luengo for Fortune

That was hardly on the minds of Barça’s founders, when they organized the first pick-up game on Christmas Eve in 1899. Most were newcomers to the area. But in the decades following, people packed the stadium, chanting Catalonian songs and waving Catalonia’s flag. Club president Josep Sunyol, a militant pro-independence Catalan, was assassinated during the Spanish Civil War, and is now memorialized in the club’s museum, which draws about 2 million tourists a year. During Spain’s 35-year dictatorship of General Francisco Franco, Barça fans were banned from singing Catalan songs. That repression helped create the intense rivalry between Barcelona and Real Madrid, which continues today. “As far as Barça fans were concerned, Real Madrid was not just backed by Franco, it was Franco,” writes the author Jimmy Burns in his book Barça: A People’s Passion.

In recent months, those old tensions have exploded to the surface. Last October, Catalonia’s leaders defied the Spanish government by holding an independence referendum; 90% of Catalans voted (although only 42% of registered voters went to the polls). Nearly six months later, banners are still hanging from windows and balconies across the city. Catalonia’s leader Carles Puigdemont is holed up in exile in Brussels, after declaring Catalonia’s unilateral independence from Madrid, and then fleeing possible arrest for sedition.

For Barça, the upheaval has been painful. Determined for the club to remain neutral, Bartomeu allowed a scheduled match to go ahead on the referendum day, at the very moment when Spanish police were storming polling stations and beating voters with truncheons. Canceling the game that day would have cost the team points in the Spanish league, La Liga. So Bartomeu ordered the game to be played with no spectators. “We wanted to show the world that something unique was happening,” he says. But the decision enraged some members who believed Bartomeu should have supported the vote; two board members resigned. Impassioned and angry, Piqué tweeted to his 18 million followers before the referendum, “We will vote.” And after the closed-door match, he wept on camera, saying it had been the worst day of his professional life, and threatening to quit the Spanish national team. “We are in a very difficult situation here,” he tells me, months later. “Barcelona has to be a club that represents Catalonia more than ever now.”

For all its hot politics, however, it is Barça’s financial structure that will have a far bigger impact on how well it survives. The franchise is owned by 143,855 members—one of the few top clubs that operates this way. All Barça members over 18 vote for the president and the board, as well as on key issues at yearly assemblies.

Former Barcelona star Ronaldinho playing with kids at a New York City public school in the Bronx in September 2016, when the club opened an office in the city. Barça plans to expand its presence in the U.S.Getty
Photograph by Javier Luengo for Fortune

Bartomeu describes the club as an exercise in popular democracy, and members—and many players—feel intensely attached to it. Yet the socios, as members are known, make up a closed world. Virtually all are from Catalonia, and increasingly, they are the children or grandchildren of members, since membership has long been closed to outsiders; parents sign their children up at birth. Piqué, like many others, was made a member at birth by his grandfather, and signed up his two children, with Colombian pop star Shakira, at birth too. “I love this club very much,” he says. “It is like my home.”

Members pay a relatively tiny 180-euro annual fee. That figure has not increased in eight years. Membership offers at least a chance of landing season tickets. “We have a waiting list of members wanting a seat,” Bartomeu says. “My oldest son is 19, and he’s been on the waiting list for 19 years.”

With Barça’s ballooning costs, the membership fees from its socios today generate just 5% of its revenue. Since most seats are assigned to members, its ability to raise money from ticket sales is limited. While other clubs also face that problem, at Barça, members would need to vote to raise ticket prices in order to generate more profits—a decision they are unlikely to take.

There is another oddity at Barça too: The president and board members are required to put up 15% of the club’s yearly revenues as collateral when they’re voted in, as a guarantee against possible losses. That sum could reach 7.5 million euros each, once club revenues are 1 billion euros a year.

Despite that, board members are aghast when asked if Barça would ever be sold or transformed into a more traditional profit-making business. “No. Never. It is our club. The members,” says Manel Arroyo, the board’s vice president, echoing the response of others I ask. “People come here from different parts of the world, asking to buy the club,” he says. “We say, ‘It is not about the money.’ ”

Perhaps not. And as such, Barça is a refreshing change from the heavy commercialism of pro sports—a fact that ironically boosts its brand and wins over millions of fans.

But Barça’s ability to remain on top will depend on money. “It will be hard for a club owned by 150,000 members to either keep this ownership model, or if it keeps it, to continue competing at the very top level,” says Victor Font, CEO of Delta Partners, a global telecom advisory and investment firm, who is considered one possible successor to Bartomeu in 2021. Font, like Bartomeu and Piqué, has been a Barça member since he was an infant, as were his father and grandfather, and in 2015 authored a strategy plan for the club called Sí al Futur, or “Yes to the future,” after growing concerned over its long-term viability. He says members are generally content, since Barça continues to win titles. But he likens that relaxed attitude to ignoring climate change, saying, “If you are enjoying the weather, it is difficult to see it coming.”

Font’s strategy would mark a sharp break—and perhaps offer a blueprint for other clubs, as they try to modernize their operations. Under his plan, Barça would become something more resembling a multinational enterprise, able to capitalize on its giant global popularity. He says it makes no sense that a hugely well-known club like Barça doesn’t do more to monetize its massive fan base. He estimates each fan is worth just $2 a year to Barça now. If the club found a way to charge each fan a dollar a month—say, by subscribing to video-streamed matches—then 400 million fans would generate $6 billion a year. He also believes Barça should own its image rights and sell merchandise directly, rather than allowing Nike, Adidas, and others to claim the lion’s share of the value. “Clubs play a very small role in the value chain of football,” he says.

Font is not the first to suggest dramatic changes—and he echoes the worries of many in the football world. In 2008, eight Barça board members quit after disputes over future direction. Among them was then vice president Ferran Soriano, who had pushed to open Barça franchises around the world. The socios blocked the idea, fearing it might dilute the club’s Catalan roots.

Today Soriano is CEO of Manchester City football club in the U.K.’s Premier League, where he helped set up City Football Group, or CFG, a company jointly owned by Abu Dhabi and China. The group holds stakes in six clubs across the world—much like Soriano’s thwarted vision for Barça. Britain’s Guardian newspaper calls it the sport’s “first truly multinational corporation—a Coca-Cola of soccer.”

Barça’s socios might never accept turning their beloved club into a global commodity. But one start might be installing a paid board with deep knowledge of the football industry, which would set the strategic direction for team CEO Oscar Grau, rather than relying on unpaid directors to oversee operations, as Barça does now. “I know they are fully focused, but they don’t earn any money to run it,” Piqué says. “I think this is something that has to be changed.”

Having founded a video game company, and with major investments in an eyewear company, Piqué is increasingly involved in business strategy himself; in 2017 he underwent an executive program at Harvard Business School, and he says he hopes to run Barça in the future, after he finally retires from football, probably in a few years’ time.

Font agrees it is time for more professional FC Barcelona management. “The board should be a proper board, like the board of Apple or Uber,” he says. Instead of winning league trophies, there should be one true measure of how well the board is running Barça, he says: “Whether they will be able to compete in 2030.”

How Barça fares in 2030 could have a drastic impact on the future of the boys kicking footballs at La Masia academy. Each one hopes that by that time—12 years from now—their names might be added to the honor roll on a wall in the academy, listing dozens of the major stars who began as children here: Andrés Iniesta, Pep Guardiola, and others.

But breaking into those ranks will not be easy. “Only about 5% make it to the first team,” says Ana Merayo, who runs La Masia’s Comprehensive Athlete Care Service. “We always give them a plan B in real life, like academics.” She leads me into a classroom of teenage players studying finance. There a teacher shows examples of transactions worth a few hundred euros. But the boys in class have far bigger dreams: By 2030, nine-figure earnings like Messi’s could be within reach of many players. And most hope the money will be earned right here, driving balls between the goalposts in Barcelona.